Business and industry are currently in the throes of the fourth industrial revolution, adopting new technologies like machine learning and digital twins to ramp up efficiency and productivity.
One of the other key technologies being served up on the platter of progress has been automation, whereby tasks and workflows are undertaken with limited human assistance. Automation is being used by at least 67% of all companies, with 31% having used it to fully automate one of their major functions.
According to 2023 statistics, up to 75% of accounting tasks could be automated, and 45% of all accountants intend on using the technology. But what are the benefits and drawbacks of doing so? Here’s everything you need to know.
The advantages of accounting automation
The key advantage of the technology is convenience. Once set up correctly, all information regarding accounting functions is readily available via a dashboard. Reports can be quickly generated on demand and are assured to be as up to date as possible, given that data is updated multiple times per day.
Data is also more accurate than being collected manually or via disparate systems too, boosting the effectiveness of the accounting function.
Highly accurate, on-demand data can be used by decision makers to boost the confidence of their calls, managing profit and loss, and understanding it in greater detail than before. Combining every source of data from all business functions gives an unparalleled view of the business, its activities and how they are performing.
The disadvantages of accounting automation
The main negative of using accounting automation is that the systems themselves can be quite difficult to implement for the beginner. The use of accounting consultancies can simplify the process of automating accounting functions, in particular regarding the implementation of systems and the training of staff. However, this can be onerous for businesses which lack the funds for transformation.
Service and support can also prove difficult when the system has been implemented by a third party which no longer has a relationship with the accounting firm. And if users have specific questions they need answering, not having a human expert to discuss their concerns and questions with can be a barrier to getting the most out of what can be a significant business investment.
Cloud-based accounting automation systems are typically safe, but if incorrectly implemented, they can be open to cybercrime. That’s why it’s crucial they are set up by experts.
And finally, while the data provided by an accounting automation dashboard can be displayed accurately, if the data collection is set up incorrectly, the entire function can suffer while the error is rectified.
Think accounting software might be a good choice for your business? Let us know your thoughts regarding this new technology in the comments section below.